It is a very clever tactic of Fred Wollard to offer a £16,000 reward to every member of Standard Life staff if the Edinburgh insurance giant were to de-mutualise. If the colossal Scottish mutual society, with assets of more than £15 billion, were to convert to a conventional plc, he says he will also set aside 1 per cent of the shares for a charitable entity. By these two strokes, he has scored a hit on the board's complacency. He has also animated the self-interest of all the employees into at least seeing that he has a fair run at the general meeting to vote on his demutualisation resolution. A £16,000-per-head reward would in most cases be far exceeded by the pay-out the staff would enjoy as policyholders. Many, possibly as many as half, would enjoy a cash windfall of six figures.
Wollard seems an unlikely victor. He is more diminutive than any David, and Standard Life is more gigantic than any Goliath. He does have the extraordinary weapon of self-interest as far as all those legions of insurance staff are concerned.
Standard Life stands in its own league. Most other mutuals that have survived the tide of conversion to public company status are tiddlers. The directors will huddle. They will appoint PR advisers. They will flounder. Who will forgo a huge dollop of cash for some abstract virtue in the "savings club" nature of its present status? Wollard is entirely unknown in Edinburgh. He is an Australian living in Monaco. He has no connection to Standard Life other than as a policyholder. Yet his resolution looks likely to transform a truly august financial institution. With Scottish Widows sold off to Lloyds TSB, only a few minor mutuals survive. It may be wise to buy a policy with Scottish Provident.
The Standard Life's anti-demutualisation slogan can only be a variation on the unpersuasive theme: "You don't really need that £100,000!"
Christopher Garnett, chief executive of GNER, the franchise-holder of the east coast railway line linking Scotland with King's Cross in London, has taken to denying that its owner, Sea Containers, might sell off some of its shares. Why deny it? It has done a good job.
A GNER flotation would be good fun and brilliant PR for Sea Containers. It is impossible to guess a value. The market could. Now is the time to strike. The company has won a 20-year extension on its franchise. That is the primary asset and it starts to depreciate from the day it is awarded. Garnett argues, startlingly, that the railways have not been privatised. "All we have is a management service contract. We are a transient presence." That is refreshingly honest. The market rewards frankness.
